The price of investing through your bank

I used to be a private banking client, invested in my bank's own funds.
Invitations to events. Free champagne and canapés. The black card. It felt like an upgrade. But in reality, I'd just become a bigger, meatier prey.

Private banking has a beautiful trick: It plays on the oldest human weakness; the need to feel important (status). The more they charge you, the more special they make you feel. The excuse is that you get 'personalised advice' but most of this advice is centered around buying more of the bank's own products.

Let’s look at the math. €1M invested for 20 years, at global equities' long-run average of ~8.9% a year (MSCI World, 40yr)

Passive index ETF at 0.07% → ~€5.4M
Bank's own product with fee stack at 2% → ~€3.8M

Same market & period. €𝟭.𝟲 𝗺𝗶𝗹𝗹𝗶𝗼𝗻 𝗼𝗳 𝗱𝗶𝗳𝗳𝗲𝗿𝗲𝗻𝗰𝗲 - 𝗺𝗼𝗿𝗲 𝘁𝗵𝗮𝗻 𝘆𝗼𝘂𝗿 𝗲𝗻𝘁𝗶𝗿𝗲 𝗼𝗿𝗶𝗴𝗶𝗻𝗮𝗹 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁. Spread out: €𝟲,𝟴𝟬𝟬 𝗮 𝗺𝗼𝗻𝘁𝗵, 𝗲𝘃𝗲𝗿𝘆 𝗺𝗼𝗻𝘁𝗵, 𝗳𝗼𝗿 𝘁𝘄𝗲𝗻𝘁𝘆 𝘆𝗲𝗮𝗿𝘀.

Those 'free canapés' are quite expensive now. And cost comes from somewhere: Your kids' education fund. The family trips that got trimmed. Retiring 5-10 years later than you prefer.

Would you have signed up if it were shown like that?

The €6,800 a month hides as ‘embedded cost’, layer after layer. The fund came with "free" advice but roughly half of the fund's management fee, often more, flows straight back to the bank that sold it to you (the kickback in Spain is called a "retrocesión"). No bill. No line item. How convenient.

As a private banking client, you often pay an explicit fee outside the fund, and every number you're shown, from factsheet to annual review to Morningstar stars, is calculated before that fee. Add custody, brokerage, FX spreads, sometimes a performance fee, sometimes a life-insurance wrapper with its own annual cost and years of lock-in. Because that's the rule of embedded costs: the more wealth you have, the more layers get built around you.

The model relies on nobody putting the documents side by side. And yes, untangling your fund setup feels like a chore, which is exactly what the banks count on. Every year of not knowing your number is another year of it compounding - the wrong way. Inertia is expensive; roughly €6,800 a month in the example above.

This is why we built Senso: a financial guardian on your side (and with no product to sell you). It reads everything; funds, wrappers, accounts, policies - and adds up what no single report will: what you're paying, to whom, for what, right next to what you're getting. It reaches out before things drift. It doesn't file or advise. It makes sure that when you sit across from your bank, you're prepared, understanding the full picture.

Stop being the prey. Be Senso.

(𝘐𝘭𝘭𝘶𝘴𝘵𝘳𝘢𝘵𝘪𝘷𝘦 𝘮𝘢𝘵𝘩𝘴, 𝘯𝘰𝘵 𝘢 𝘧𝘰𝘳𝘦𝘤𝘢𝘀𝘵 𝘰𝘳 𝘢 𝘳𝘦𝘤𝘰𝘮𝘮𝘦𝘯𝘥𝘢𝘵𝘪𝘰𝘯. 𝘙𝘶𝘯 𝘪𝘵 𝘸𝘪𝘵𝘩 𝘺𝘰𝘂𝘳 𝘰𝘸𝘯 𝘯𝘶𝘮𝘣𝘦𝘳𝘴.)